Pearson: Welcome to Market Plus here on our Market to Market Web site. I'm Mark Pearson, glad that you've joined us and by the way, be sure to tell a friend about this great service available from Market to Market. Doug Hjort, our market analyst this week and Doug, we talked about the wheat market and Doug, you've been on here, you've been talking about these low supplies for a long time and at the same time, never get any demand going. What's happening in the world on these food grains?
Hjort: There's a couple of things, Mark. Number one, the most recent thing that happened this past week, the former Soviet Union has got a terrible winter wheat crop and an awful lot of winter kill. Obviously with that you don't know for sure what the damage is but it's projected to be, in Ukraine for example, half the crop they had last year. Well, in the last two years they have bumper crop so they had this excess, they were exporting and now Russia stopped exporting and Ukraine, both stopped exporting their wheat that they had sold to Egypt. Russia says it's because of the war, they have to come through the channels there by Turkey and they just don't want to do that. But others say no, it's probably just that their new crop is of such poor shape they just don't want to ship anymore. Well, that did not turn into new sales to the United States or from the United States to Egypt this week. But it might be turning in the new year. The problem with wheat, it's been that next year forever it seems like. And we did have prices run up last summer but they didn't stay there, not for very long anyway. And now you're looking at the prospects of Canadian production coming back this year to a more normal level, maybe Australia although it's still dry there. But those two countries had terrible crops last year. So you've got Russia coming up with a bad one this year and those two coming back, maybe our crop bigger, it's still going to be kind of a touch and go as far as supply/demand goes. One of the things on total grain demand, one thing we've seen ever since about last November, October/November, the world total consumption of grains, total grains, has been inching down just a little bit. It's still just fractionally above what it was last year but not nearly what it was projected to be to start with. And this is the first year, this will be the first year in a long time that total world grain demand has inched down. That trend line had been very strong going to the upside and now that that's weakening for whatever reasons, economic, warfare's, I don't know, but it has been turning down. That's why our corn exports are off so much, 250 million bushels from what they were projected to be back four or five months ago. And the wheat export projection had to be lowered as well. So, really hitting the United States on exports but total world demand for grain has been down some.
Pearson: Okay, well that kind of gives us the background but what's been happening in this wheat market and it has been a next year, next year phenomenon and it looks like it's going to be next year again at this pace. Doug, let's talk about something else that's going on. USDA hogs and pigs report, now there was a lot of faith in that a year ago, the last quarterly report on hogs and pigs and yet we didn't see the numbers come down. Now, you've looked at the new USDA hogs and pigs report released Friday afternoon. Do you think it's going to be more reflective of what's actually happening in terms of numbers? Are we going to see slaughter levels start to taper off some?
Hjort: I think from a cash standpoint and just from a number standpoint we should see prices continuing to move a little bit higher throughout April, May, June, into July maybe and so on and with these new numbers maybe we'll have a dip into the fall like we always do but maybe it won't go down as much, that obviously remains to be seen out there.
Pearson: But the negative thing on the hogs, it has been for months, but especially in the last month and a half or two months has been the futures market. The futures market has just panicked. Whenever there's the talk of war of course the futures prices will limit down. You know, when it was imminent that we were going to war. Why? The Muslims don't eat pork, what difference would it make to pork supply or demand, either one? And you're talking about futures breaking this week again, breaking another major support level and plummeting down two, two and a half dollars.
Hjort: The cash market didn't do that, it eased back a little bit and then by Friday it was starting to come back, not going higher but at least holding in there. But it's the futures market, we've got to turn that market back up. Now, most likely what happened, it had rallied too much early on, late December and so on, it had rallied so much it had absolutely no place to go on the upside, couldn't do it so it started falling apart, people taking profits, but sort of coming down and then every rally since then has just been a modest rally and then boom, break another level and go down again. So, until the futures market can turn and this report might just do that, futures traders don't spend a lot of time looking at the actual cash hog, the inventories and that sort of thing but it could just be something that tells them hey, there's no reason to be negative on these distant futures, next fall futures anymore. So, let's take a look. See if they have any bounce to them. So, I would think that the futures might find some support in this, not three, four or five dollars but stop the bloodshed on the downside and then the cash market can kind of start to prove itself I think.
Pearson: At least give them a good attitude check. All right, good point Doug. Doug Hjort joining us this week, thanks for being a part of our special market program here on Market to Market, our Market Plus on our Market to Market Web site and be sure to tell your friends and be sure to join us again next week. For all of us here at Market to Market, have a great week.